We remove Apple from the Americas Conviction List, but we maintain our Buy rating. The most recent product cycle has not driven the market share and new user growth we had anticipated, and we believe Apple may find it difficult to hit consensus expectations in the March and June quarters, and as a result, we lower our estimates and our price target. Since being added the Americas Conviction List on December 12, 2010, AAPL has gained 33.8% versus a 25.9% gain in the S&P 500."

I can see you want more

"This is the 'zero margin strategy'," said Fubon Securities analyst Arthur Liao. "Ninety-seven percent of Google's revenue comes from advertisement, so it needs to sell more mobile devices in order to reach more consumers."

Ha. Analyst expectations. Of course analysts are disappointed that Apple can't continue to have quarterly revenue growth approaching 90%. So Apple's stock has come back to Earth. The market has a finite size, after all.

Yet, to read the press coverage, you'd think Apple was selling less devices, or losing money doing so, neither of which is the case. Apple pulled in a profit of $13 billion last quarter. At last check, Apple takes 72% of the profit in the smartphone industry (Samsung takes 29%). The rest of the industry lost money.

"This is the 'zero margin strategy'," said Fubon Securities analyst Arthur Liao. "Ninety-seven percent of Google's revenue comes from advertisement, so it needs to sell more mobile devices in order to reach more consumers."

So Google is pursuing a 'zero margin strategy' with hardware in order to be able to show mobile ads which pay half as well as the desktop web ads their revenue is currently based on. And this is supposedly an obviously better business model than selling people multi-hundred dollar devices with nice solid profit margins?

Google doesn't publish figures, but given how much money Google plausibly makes from each Android handset (I've seen estimates of $2-10/year) vs. what Apple makes from the sale of an iOS device, there very possibly aren't enough people on the planet for Android to see the kind of unit growth that would be necessary for Google to match Apple's current mobile income on the basis of its current business model.

The only way in which Google's model could plausibly beat out Apple's would be if Apple's sales absolutely tanked, something that shows no particular sign of occurring. (You shouldn't confuse a lack of continued 90% annual growth with 'tanking'.)

Your forgetting that this price contraction is having on Apples profits, Apples margins are going down which is why their stock price has fallen, the fact is it is impossible for Apple to get back to the fat margins they had before with the competition they are facing in the market. I know how much you like youtube videos here is the same guy as before who correctly predicted Apples share price going down http://www.youtube.com/watch?feature=pl ... bJK95ECyBA

Your forgetting that this price contraction is having on Apples profits, Apples margins are going down which is why their stock price has fallen, the fact is it is impossible for Apple to get back to the fat margins they had before with the competition they are facing in the market.

Apple's margins fell last quarter in large part because of the fact that they refreshed 80% of their product lineup. iPhone ASP was nearly unchanged from the previous year; the pricing pressure that some have been predicting on Apple's premium products was not in evidence in last quarter's results.

In any event, even if Apple's margins contracted significantly, there would still be far more money in hardware sales than mobile advertising. Samsung's margins are substantially lower than Apple's, and they're also making quite a lot more money in the mobile market than Google is.

Nobody claimed Apple could maintain 70%+ growth forever. The advice in the article you're linking to (make some big, splashy acquisitions) seems fairly terrible. You are in no way making the case that other mobile business models, particularly Google's, will provide results superior to Apple's mobile business model.

It's difficult to make a rational case for Apple's current share price. The market appears to be spooked by margins falling back to about where they were in 2010 and by iPhone growth leveling off, but Apple doesn't need ~50% iPhone margins to continue being an extremely successful company, Apple is pretty clearly working on both lower cost and larger screen iPhone models that will likely provide quite a respectable bump to unit sales, and iPad growth remains quite strong.

Apples days of making run away profits are over their profits are starting to fall like the video says all fads come to an end and i would rather be in Google's shoes than Apples going forward because Google will crush their profits.

Please learn to read SEC 10Q filings, it really would help you understand why Apple showed lower margins than they actually achieved. Or How Apple generated 20% more cash year over year (12 Billion versus 10 Billion). Notice 10 Billion in Net profits, yet 12 Billion in actual more cash in the bank.

Their profits are being squeezed from all sides and they are no longer the best smart phone in the market so the decline is inevitable which is reflected in the share price. When your business model is based on the new shiny product question is what happens when your no longer the best?

Their profits are being squeezed from all sides and they are no longer the best smart phone in the market so the decline is inevitable which is reflected in the share price. When your business model is based on the new shiny product question is what happens when your no longer the best?

This post sounds like the kind that Samsung pays for all over the net (and were fined for in at least one country).

Disclaimer: I am not, for even a second, questioning the sincerity of the the post so referenced.

Their profits are being squeezed from all sides and they are no longer the best smart phone in the market so the decline is inevitable which is reflected in the share price. When your business model is based on the new shiny product question is what happens when your no longer the best?

Your question is based on a false premise. Apple's business model, unlike some of its competitors', is not based on having the newest, shiniest product. In fact, Apple's newest, shiniest phone accounts for only half of its sales. Yes, the nearly 3-year old iPhone 4 still accounts for almost 15% of unit sales.

Apple's business model is based on brand loyalty, ecosystem lock-in and repeat customers. And it seems to be working:

Quote:

Of those surveyed, 91 percent of iPhone owners intend to buy another iPhone, while 6 percent plan to switch to an Android device with their next purchase. In other words, more than nine out of 10 iPhone owners are loyal to the platform. Once you buy an iPhone, chances are high you’re going to buy another.

That’s not quite as true for Android. Yankee found that 76 percent of Android owners intend to buy another Android phone. A big number, sure. But it means that 24 percent of Android phone users plan to switch to another platform. Guess where the majority of those professed switchers are going — 18 percent to iPhones.

Flip side: Just 6 percent of iPhone owners said they plan to switch to Android.

Bottom line, Apple doesn't need to have the "best" phone, whatever that means. They just have to be in the ballpark and their other strengths come into play.

Is it just me, or has the thread talking about the holy war, just turned into another skirmish in the holy war.

"We have met the enemy and he is us."

What holy war? Apple dominates in every way important. Android dominates the feature phone market and the third world low margin throwaway phones. iPhone dominates the Smartphone market. It's really simple. The SIII and now the S4 are competing with the 4 and 4S... The only high end Android phone that comes close to competing to iPhone in Fit and Finish, seems to be the HTC. We'll have to see if they can get traction with it. In the meantime, Apple is preparing to launch their next generation phones: A replacement for the 4 on the low end and an upgrade to the 5 on the high end. With a possible larger screen release as early as September. Of course, that will complete the destruction of the S4's image when set against a truly high end phone with a gorgeous and true HD display. Not that Pen tile fake HD Samsung sells.

Is it just me, or has the thread talking about the holy war, just turned into another skirmish in the holy war.

"We have met the enemy and he is us."

What holy war? Apple dominates in every way important. Android dominates the feature phone market and the third world low margin throwaway phones. iPhone dominates the Smartphone market. It's really simple. The SIII and now the S4 are competing with the 4 and 4S... The only high end Android phone that comes close to competing to iPhone in Fit and Finish, seems to be the HTC. We'll have to see if they can get traction with it. In the meantime, Apple is preparing to launch their next generation phones: A replacement for the 4 on the low end and an upgrade to the 5 on the high end. With a possible larger screen release as early as September. Of course, that will complete the destruction of the S4's image when set against a truly high end phone with a gorgeous and true HD display. Not that Pen tile fake HD Samsung sells.

Apple dominates two things: The number of cocky fans and the dollars in their wallets.

Anyone who thinks Apple dominates with fanboys (usage of which is against Ars posting rules) has never seen the legions of Google acolytes at work. God, are they a hive of angry little bees.

And how do they compare to aphelion? There's angry people on the internet saying stupid nonsense, and then there's outright insanity like aphleion where apple is his religion which he built a shrine to and pay a tithe to while boasting of doing such things.

Anyone who thinks Apple dominates with fanboys (usage of which is against Ars posting rules) has never seen the legions of Google acolytes at work. God, are they a hive of angry little bees.

And how do they compare to aphelion? There's angry people on the internet saying stupid nonsense, and then there's outright insanity like aphleion where apple is his religion which he built a shrine to and pay a tithe to while boasting of doing such things.

Almost everyone of them would be banned from Ars at the drop of a hat cf. comments on TheVerge.

Anyone who thinks Apple dominates with fanboys (usage of which is against Ars posting rules) has never seen the legions of Google acolytes at work. God, are they a hive of angry little bees.

And how do they compare to aphelion? There's angry people on the internet saying stupid nonsense, and then there's outright insanity like aphleion where apple is his religion which he built a shrine to and pay a tithe to while boasting of doing such things.

Almost everyone of them would be banned from Ars at the drop of a hat cf. comments on TheVerge.

You'll have to be sure to point this stuff out for us.

I'm at The Verge quite frequently, and I see the same old tired shit I see here.

Is it just me, or has the thread talking about the holy war, just turned into another skirmish in the holy war.

"We have met the enemy and he is us."

What holy war? Apple dominates in every way important. Android dominates the feature phone market and the third world low margin throwaway phones. iPhone dominates the Smartphone market. It's really simple. The SIII and now the S4 are competing with the 4 and 4S... The only high end Android phone that comes close to competing to iPhone in Fit and Finish, seems to be the HTC. We'll have to see if they can get traction with it. In the meantime, Apple is preparing to launch their next generation phones: A replacement for the 4 on the low end and an upgrade to the 5 on the high end. With a possible larger screen release as early as September. Of course, that will complete the destruction of the S4's image when set against a truly high end phone with a gorgeous and true HD display. Not that Pen tile fake HD Samsung sells.

Yeah it does, considering the crappy Pen tile display Samsung falsely claims as HD. What they should say is we have Green sub pixel HD only... LOL I was sitting next to a Galaxy user on the subway and even in that indoor lighting the display was so dull looking. Anyone who thinks the Galaxy line is advanced simply has no creds.

Yeah it does, considering the crappy Pen tile display Samsung falsely claims as HD. What they should say is we have Green sub pixel HD only... LOL I was sitting next to a Galaxy user on the subway and even in that indoor lighting the display was so dull looking. Anyone who thinks the Galaxy line is advanced simply has no creds.

There's lots wrong with the Galaxy S line's display, (if like me you're a photo nerd, that is) but I think you're the first person to ever describe it as "dull looking". It's usually more like "OMG MY RETINAS THEY BURN".

Putting together an Android flagship is superficially a pretty easy thing to do, and the story of the Galaxy S 4 starts out much the same as any other Android flagship from this generation. There's a 1080p 5-inch display on top, the latest and greatest CMOS sensors for front and rear facing cameras (2MP and 13 MP respectively), a powerful Snapdragon 600 SoC (which is really APQ8064AB, but more on that later) with four Krait 300 CPUs running at up to 1.9 GHz and an Adreno 320 GPU at up to 450 MHz, 2GB of LPDDR3 RAM, microSD in addition to built in storage, and removable 9.88 watt-hour battery. On the connectivity side of things we get LTE connectivity in the appropriate markets courtesy of the ubiquitous MDM9x15 LTE/WCDMA/CDMA2000/GSM multimode baseband, WLAN and Bluetooth from the latest and greatest BCM4335 802.11ac/BT 4.0 LE combo chip, and NFC from Broadcom's BCM2079x chip. There's also a new generation of touch controller inside from Synaptics, and Audience's latest eS325 noise rejection and suppression voice processor for calls. Long story short, SGS4 is packed full of absolutely the latest and greatest everything on basically every axis possible.

Putting together an Android flagship is superficially a pretty easy thing to do, and the story of the Galaxy S 4 starts out much the same as any other Android flagship from this generation. There's a 1080p 5-inch display on top, the latest and greatest CMOS sensors for front and rear facing cameras (2MP and 13 MP respectively), a powerful Snapdragon 600 SoC (which is really APQ8064AB, but more on that later) with four Krait 300 CPUs running at up to 1.9 GHz and an Adreno 320 GPU at up to 450 MHz, 2GB of LPDDR3 RAM, microSD in addition to built in storage, and removable 9.88 watt-hour battery. On the connectivity side of things we get LTE connectivity in the appropriate markets courtesy of the ubiquitous MDM9x15 LTE/WCDMA/CDMA2000/GSM multimode baseband, WLAN and Bluetooth from the latest and greatest BCM4335 802.11ac/BT 4.0 LE combo chip, and NFC from Broadcom's BCM2079x chip. There's also a new generation of touch controller inside from Synaptics, and Audience's latest eS325 noise rejection and suppression voice processor for calls. Long story short, SGS4 is packed full of absolutely the latest and greatest everything on basically every axis possible.

You could throw a lot of components into a large enough box, but try doing it in a sleek and thin one! There's nothing technically interesting in what Samsung did. The HTC One yes, the iPhone 5 absolutely, the Samsung S4 no. The S4 is just a big plastic box with a cheap pen tile display on it.

Falsely claims as HD? This is just flat-out wrong. High definition has nothing to do with the pixel layout. That will affect colors and brightness and such things, but the resolution is the resolution.

And if you'd done any research, you'd find that the PenTile displays on a 1080p screen like that one becomes a non-issue with all that pixel density.

Further, they're already moving to a different pixel arrangement, as seen on Note 2 - which is not PenTile and is damn beautiful despite sub 300 ppi.

Quote:

What they should say is we have Green sub pixel HD only... LOL I was sitting next to a Galaxy user on the subway and even in that indoor lighting the display was so dull looking. Anyone who thinks the Galaxy line is advanced simply has no creds.

You're just flat-out wrong, and you're somehow proud of it. No comprendo.